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Will Amazon move aggressively into content?

Amazon may be the internet’s dominant ecommerce company, but its ambitions extend well beyond retail.

It has fast become a key player in a market that is expected to become
very large — cloud infrastructure — and now it appears to be making some
moves into content which could be harbingers of things to come.

Yesterday, it launched Amazon Studios, a website for aspiring filmmakers and screenwriters. The concept is simple: allow those aspiring filmmakers and screenwriters to upload their work, collaborate and obtain feedback from others, and take the cream of the crop forward for possible production.

Amazon has signed a first-look deal with Warner Bros., which means that a Hollywood hopeful could someday soon see his or her concept on the big screen via Amazon. Roy Price, who is director of Amazon Studios, told the Los Angeles Times, “It’s much easier now to make movies but it’s still as hard as ever to break into Hollywood. We think we can play an interesting role in changing that.“

The deal may work out better for Amazon than it does for those hoping Amazon Studios will give them their big break. Filmakers and screenwriters who submit their work give Amazon exclusive rights to that work for 18 months. Over $2m in prizes will be given out before the end of 2011, but for an individual lucky enough to submit work that makes it to the big screen, the payday will be a $200,000 check from Amazon, far less than what most directors and screenwriters make for a feature film.

This structure might lead one to believe that Amazon Studios isn’t really a serious effort to develop Hollywood-level content, but Amazon insists that Amazon Studios is no joke. “The goal is to get commercial feature films made and distributed through the studio system,” Price stated. Even if Amazon fails to do that, the fact that it’s trying would seem to say a lot about the company’s content strategy.

As does Amazon’s purchase of a small book publisher, the Toby Press, also announced yesterday. As Martyn Daniels of the Booksellers Association of the UK and Ireland pondered:

So is the Toby Press a purchase to establish the issues involved in running a publishing operation so that they learn small with low risk. If so will their next move be more consolidation of smaller presses or to bite off a far bigger house with what will be chump change?

He concludes with an interesting observation:

It is interesting to look back at prosperous 18th century London booksellers such as Robert Dodsley who were all large copyright owners we quote from, The Life of Robert Dodsley, “… for the real money lay in ownership of copyrights, not in the retailing… booksellers were the entrepreneurs who purchased rights from authors, and, binding to others, merchandised and finished the product through advertisement and trade distribution.”

Obviously, even though money is of no concern, transitioning from a retailer to a content producer will present numerous challenges for Amazon. But it would seem that the company’s dominant position online provides a number of unique advantages that could make the effort well worth the risk.

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